The receiver/manager appointed by the Assets Management Corporation of Nigeria (AMCON) to turn around the fortunes of distressed Aero Contractors Airline appears to have met brick wall in his effort to revive the firm as its functional aircraft fleet dropped further from three to two over the weekend. This is coming as agitation by disengaged staff over severance pay continues to create problems for him on the other hand.
The bad bank had appointed Mr. Adeniyi Adegbomire (SAN), as receiver manager for the airline on February 6, 2016. But less than two years after the takeover, its fleet had dropped from 5 to 2 aircraft.
Aero had disengaged about 60 per cent of its workforce following its takeover by AMCON on February 5, 2016, declaring them redundant as protracted management crisis, saw the airline fleet dip from 18 to five and then to three with severe revenue losses.
The airline’s headaches worsened further recently when its operating fleet dropped from three to just two Dash 800 aircraft following the grounding of its only Boeing 737-500 Classic aircraft.
But it was, not an entirely hopeless situation as the airline recently received a licence from the Nigerian Civil Aviation Authority (NCAA) to commence the C-checks and other maintenance works on the Boeing 737-500 classic type of aircraft.
Recall that AMCON took over the running of the airline in 2016 and appointed new managers to run its opertions. It stated that the reason for the takeover was to protect the brand heritage of the airline, adding that its intervention was in the public interest to sustain and improve the “robust and premium quality service of the airline.” AMCON also engaged an accounting firm to undertake a forensic audit of the airline’s accounts over the last five years.
Aero Contractors is Nigeria’s oldest aviation company, which commenced business in 1959, initially providing services to the oil and gas sector before venturing into fix wing operations in 2000. Currently, AMCON owns 60 per cent of the company with the remaining 40 per cent held by the Ibru family.
AMCON had in 2010 invested N15 billion in Aero and later injected N5 billion, bringing its total financial exposure to N20 billion.
A source close to the airline, however, told Daily Sun that while the management of the airline has reabsorbed some of its technical staff following the approval given to it recently by NCAA to carry out C-Check on series of Boeing 737 aircraft, it was to pay the disengaged staff their severance packages raising concern over its financial health.
Said the source: “Most of us that were declared redundant by the Aero management are yet to be paid our severance packages months after. AMCON management is not willing to pump money into the airline without which the current management can’t get resources to carry out most of the projects already mapped out.
“Elsewhere, before you shut any organisation, you must have funds to pay the workers their benefits. AMCON and the management took the right decision to allow the airline to continue in operation but it’s unfortunate that they don’t want to pay us the severance packages as promised earlier.
“All the airline needs is just two additional airplanes, maybe two of its B737 that are going through checks abroad. Currently, Aero has only two Dash 800 aircraft in its fleet, a far cry from 18 at its peak,” the source who didn’t want to be named added.